Mike Filloon on the BEXP-Statoil deal, October 20, 2011 (part II).
Although I [MF] did not mention ExxonMobil's (XOM) possible motivation to add to its Bakken acreage in part 1 of this series, it is very possible that Exxon may want to purchase this acreage. Exxon currently has 450000 net acres in the Williston Basin. This acreage was acquired last year with its XTO Energy merger. Kodiak's acreage may not be a large enough purchase for Exxon to consider purchase, but it has acreage close to Kodiak in multiple prospects.More on the BEXP deal, October 20, 2011 -- SeekingAlpha.com. Looks like Statoil was interested in the Bakken for the production, as well as the education of working unconventional fields:
Statoil shareholders, on the other hand, have very little to dislike about this deal. Statoil has been working very aggressively in recent years to expand their production base outside of Norway. The acquisition of Brigham Exploration serves to further this goal. Brigham is based in Austin, Texas but has strong positions in the Bakken and Three Forks unconventional oil plays in the Williston Basin in North Dakota and Montana. While Brigham does have other assets, Statoil CEO Helge Lund made it quite clear that the biggest reason for acquiring Brigham is to acquire the Bakken and Three Forks assets, stating,
“The U.S. unconventional plays hold a substantial resource base and represent an increasingly important part of future energy supplies. Statoil has step by step developed industrial capabilities through early entrance into Marcellus and Eagle Ford. Entering the Bakken and Three Forks tight oil plays and taking on operatorship represents a new significant step for Statoil. We are positioning ourselves as a leading player in the fast growing U.S. onshore oil and gas industry, in line with the strategic direction we have set out.”
So much for Kinder Morgan buying El Paso Corp as the big story of the morning. Another story that falls in same category: billionaire with $12.6 billion for energy purchase. Link here.
HAL: profits up 27 percent. 94 cents vs 91 cents forecast.
With regard to Statoil and BEXP: link here.
Norwegian energy company, Statoil ASA, on Monday said it has agreed to buy Brigham Exploration Co., a U.S.-based oil producer focused in the Bakken and Three Forks oil plays, for $36.5 per share in cash. The total equity value of the deal is about $4.4 billion, reflecting an enterprise value of approximately $4.7 billion. The deal is expected to close by the end of first quarter of 2012, subject to terms and conditions.
Here's Statoil's presentation.
BEXP: 20,000 bopd; could ramp up to 100,000 bopd in five years.
Quick comments:
1. BEXP was not who I thought would "go" first.
2. I think this tells us the Bakken has got international attention. If anyone still doubted the Bakken, this might change their thinking, although I doubt it.
3. What's the biggest story line? The Bakken companies need deep pockets to keep funding these wells. The BEXP Lucy Hanson well must have broke the bank -- 2.7 million pounds of ceramic to frack. BEXP/CEO said as much:
"A bigger enterprise with a larger balance sheet will be better positioned to take advantage of our large and growing inventory of Williston Basin drilling locations and the associated assets. We are excited to see this transaction completed and look forward to having our assets and employees integrate with the Statoil organization and the substantial asset position that they are growing in their U. S. onshore business," said Bud Brigham, Brigham Exploration's Chairman, President and CEO.4. The next biggest story line? How important the Bakken is.
5. Next story line? Who's next and for how much? I have my thoughts, but I never guessed BEXP, so I won't opine now. There will be plenty of talking heads talking about this.
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So, Bud sold BEXP --
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